The prioritization of immediate economic gains from real estate development has often ignored the long-term risks of climate change and extreme weather events. This approach has led to the construction of homes in vulnerable areas without adequate consideration for future insurability or resilience, contributing to the risk of mortgage defaults as these homes become uninsurable.

The risk is exacerbated by a centralized system of planning and regulation, which may not always account for the localized risks of extreme weather or integrate sufficient flexibility to adapt to changing climate conditions. Centralization in mortgage and insurance industries also means that decisions and policies affecting wide areas are made without adequate local knowledge, potentially underestimating the risk to homes and leading to a crisis when extreme weather strikes.

The legal and financial frameworks surrounding property ownership and mortgage lending fail to dynamically account for the increasing risks posed by climate change. The inability of the current system to adapt to these evolving risks leads to homes becoming uninsurable and subject to mortgage meltdown, as the static models of risk assessment and property valuation are overtaken by the realities of climate impact.